How do I animate a character with dangling chain
You would need to enable rigid body from the physics tb for each chain link. Set the one you want to animate as passive all others to active. The collision shape must be Mesh.



Settings for the links:




To control the passive link by an armature you could add a Copy Location Contrained




If the chain breaks in the simulation increase the Solver iterations from the Scene / Rigid Body World settings and click Free Bake followed by Bake All Dynamics.



Demo .blend